In response to recent industry changes, the Irish Stock Exchange
("ISE") has amended its suitability requirements for
prime brokers with immediate effect. In particular, the current
definition of the "Specified Credit Rating" for Prime
Brokers has been amended to remove the reference to the long term
credit ratings and only the reference to short term credit ratings
has been retained.
The amended Specified Credit Rating requirement for Prime
Brokers appointed to an ISE listed fund has been lowered where the
credit exposure to the prime broker is less than 40% but will
remain the same in situations where the exposure is more than
Listing Rule 7.7(a) now reads as follows:
Listing Rule – 7.7
7.7 The prime broker must satisfy:
(a) The specified credit rating requirement;
(b) The financial resources requirement; and
(c) The regulatory requirement
Specified Credit Rating Requirement means in
relation to a legal person, a requirement either that such person
or that a parent company of such person has the specified credit
Specified Credit Rating means a minimum credit
rating of 'A2' for long term debt from the credit agency of
Moody's or 'A' from Standard & Poor's or Fitch
and a minimum of 'P-1' or 'A-1' or 'F1',
respectively, for short term debt from those same agencies.
Change to definition of Specified Credit Rating
a) a minimum of P-1, A-1 or F-1, respectively for short term
debt from the credit agency of Moody's or Standard &
Poor's or Fitch;
b) Minimum short term credit rating of A2 or P2 (or equivalent)
from the credit agency of Moody's or Standard & Poor's
or Fitch provided that the maximum exposure of the applicant to the
Prime Broker is limited to 40% of the Net Asset Value of the
This article contains a general summary of developments and
is not a complete or definitive statement of the law. Specific
legal advice should be obtained where appropriate.
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